Billionaire Nick Hanauer Has The Best Reasons For Raising Minimum Wage

Nick Hanauer (not pictured here) is rich, and he doesn’t think leaving poor people poor will create more people as fortunate as he is. | Source: ShutterStock

Self-proclaimed “ultra rich guy” Nick Hanauer, one of the first investors in Amazon, as well as several other startups that he later sold for zillions of dollars, is a member of the 0.01 percent. And as rich as he is, he understands that the minimum wage increase that the president and Congress have been proposing but not necessarily putting into action is pretty necessary.

In an essay published on Politico, Hanauer makes a slew of wonderfully simple but gloriously accurate points. I’ve compiled my favorite excerpts below, but do yourself a favor and read the entire thing here. It’s beautiful.

“Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky untried policy for us. It’s doubling down on the strategy that’s already allowing our city to kick your city’s ass.”

…

“It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.”

…

“Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.”

Where is this money coming from to pay these workers more than 50% over what they’re making now?

changes for need not greed

when I was growing up highschoolers were mainly the only ones making minimum wage (which was a little more than $2). we worked at the typical places & were so glad to have a job. I remember my dad saying there was a nice man w/ a family of 5 working at a big company with entry level work & had never graduated from school. he made $10 to start & within a few years $12. he was able to provide comfortably because that was a decent paycheck. I always felt that minimum wage should be more of a starting point for young adults of highschool or college age & more for a full time employee as well as family providers. there is a feel of disproportionate ways to deal with issues & the more the government is involved the bigger the gap….

Aryllia

As long as the workers spend their money so that it goes back into the system, it should become a positive spiral. Like it says in the text: if you pay workers so little that they have to buy food stamps then you’ll go with a loss. If you pay workers enough that they can spend it in stores then the money will return into the businesses. Spending is a vital part of a healthy economy but it requires people with spending capacities.

whynot

How do you argue with this? Easy. Raise min wage to $15 everywhere, and inflation skyrockets. Businesses aren’t just going to absorb the loss. They’re going to charge three times as much for their goods…..or even more likely, move their operations out of the state/country like so many already are. Why are so many people poor these days? Its not because 90% of folks on welfare were recently laid off, or barely scrapping by….its because they cash welfare checks, and then buy a $500 iphone5! You say get a job that pays a living wage….and I agree, that’d be great. Too bad these same people refuse to GET a job in the first place, and those who ARE willing to work, think they’re too good for mcdonalds and some of the other largest employers in the nation, because they know they’ll have to deal with other ghetto assholes like themselves. Not to mention, most people aren’t on welfare out of need….it IS their job. If the gov’t is gonna pay you $800 a month because you have 3 kids you don’t care about…why would you WANT to go get a job? Seriously…..this is NOT the answer.

NotJustAGirl

People have to be employed to earn a wage, minimum or otherwise. Yes we should raise minimum wage, but we also need more people to have the opportunity to earn it.

Lilly

I thought with raise of minimum wage, it will raise living cost as well, so in turn this idea is amazing, but not ideal to what will happen to the economy. plus it isn’t fair to people who already have gotten an education and WORKED their way up to living comfortably. Now Since there isn’t any work in success and its just giving to live as you wish wouldn’t make it fair to anyone. there are Rich, poor and middle class for a reason. Now I fall in the very poor category, but I would much rather work into building my life and getting things myself than having them handed to me. There is no lesson in that. Success is also a feeling and feeling successful only happens when you work for it. I don’t want anyone getting hande3d money for working at McDonalds, even though the work is tedious, the work you do in school to get successful and EARN that $15 an hour. Success iswnt given, its earned by doing it YOURSELF.